report - Intro, background.docx

7/25/2019 report - Intro, background.docx

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Introduction

Hoa Phat Group is one of the leading private industrial production groups in Vietnam

with the vision to become a leading multi-disciplinary industrial manufacturer in Vietnam well

prepared for global integration with steel production as its core business activity. ith a long

history of development! Hoa Phat group has gained significant achievements and reputation in

domestic mar"et. #egarding the changing economic condition and business environment! the

Group is facing noteworthy challenges and opportunities! which are analy$ed and argued in this

paper.

Background

History

Hoa Phat Group was founded in %ugust &''( as a trading company speciali$ing in

construction machines. )ver the time! it e*tended the business in different field such as

+urniture! ,teel Pipe! ,teel! #efrigeration and #eal state by establishing Hoa Phat +urniture

oint ,toc" /ompany 0&''12! Hoa Phat ,teel Pipe /o.! 3td 0&''42! Hoa Phat ,teel oint ,toc"

/ompany 0(555! which is now Hoa Phat ,teel )ne 6ember /o.! 3td2! Hoa Phat #efrigeration

ngineering /o.! 3td 0(55&2! Hoa Phat 7rban 8evelopment and /onstruction oint ,toc"

/ompany 0(55&2 and Hoa Phat 9rading /o.! 3td 0(55:2.

In (55;! there were some significant changes in the company. In anuary (55;! Hoa Phat

restructured to a Group model! in which Hoa Phat Group oint ,toc" /ompany is the parent

company of its subsidiaries and affiliates. In


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integrated comple* pro=ect in Hai 8uong province with the steel production technology from

iron ore to steel! and invest to e*ploit minerals to create input for steel production.

(55> was a year with many difficulties in economic environment such as rising interest

rates! e*change rate fluctuations! volatility in the price of primary commodities in the world and

in Vietnam due to the crisis in the world economy. 8espite the overall obstacle of the whole

industry! at the end of the year! Hoa Phat still presented the positive result in the operation of the

Group? return on e@uity 0#)2 reaching (&A! higher than that of (55; 0(5A2B return on total

assets 0#)%2 reached &1A in (55> compared to &:A in (55;. In late (55>! the total assets of the

Group reached 1!4C' billionB @uity reached :!&&& billion.

In (55'! Hoa Phat Group ac@uired %n 9hong 6ining investment oint ,toc" /ompany

and Hoa Phat nergy oint ,toc" /ompany as a signal to e*pand the operation in mining and

energy to support the steel production process.

,pecially! in (5&1! Hoa Phat officially launched Hoa Phat +eeds Production D 9rading

)ne 6ember 3imited 3iability /ompany! mar"ing a new step in the groupEs development history

by penetrating the agricultural sector! with a charter capital of V


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GroupStructure

)vertime! Hoa Phat has been continuously e*panded its si$e and operation. %s of ('

+ebruary (5&4! the Hoa Phat group had &> subsidiaries and & associate 0Hoa Phat - ,,G 6ining!

oint ,toc" /ompany2.


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0Hoa Phat GroupEs (5&1 %nnual #eport 2

Current Business Performance

y the end of (5&1 the group achieved revenue of V4: billion and profit after ta*

of VA! respectively! an increase of >A


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as compared to (5&:.9he main activities of Hoa Phat Group can be divided into four groups!

which are steel! other industrial production! real estate! and agriculture. 9he core segment! steel

production and trading accounted for ;'.:A of the groupEs revenue and >(.CA of its profit!

contributing to the solid platform and internal force based on which the Hoa Phat group will

boost its growth in the future with its new segment! i.e. agriculture. 9he form of conglomerate

allows Hoa Phat to have strong financial support to invest in new segment based on the profit of

the primary segment. 9he following charts show the contribution of each sector into the GroupEs

profit and revenue.


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0Hoa Phat GroupEs (5&1 %nnual #eport2

#egarding liabilities and debts! Hoa PhatEs debt ratio e*perienced a decrease over the past

three years from &.:( in (5&C to 5.;4 in (5&1! which means the ris" of failure to pay has been

reduced. 9he ban" borrowing to e@uity ratio in (5&1 was 5.:;! considered to be a safe indicator

for a typical heavy industrial production group.


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0Hoa Phat GroupEs (5&1 %nnual #eport2

9he ownerEs e@uity the ownersE e@uity of the group as at C& 8ecember (5&1 was

V


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%ppendi*


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0Hoa Phat GroupEs (5&1 %nnual #eport 2

Documents

report - Intro, background.docx